Insight
The Australian Consumer Law: a practical guide for businesses
18 Jul 2026
The Australian Consumer Law is the national consumer protection framework that every business trading in Australia has to comply with. It sits as Schedule 2 to the Competition and Consumer Act 2010 (Cth), applies uniformly across every state and territory, and is enforced by the ACCC together with state and territory fair-trading regulators.
The ACL is broad. It regulates advertising, product labelling, refunds, warranties, standard-form contracts, sales practices, product safety, and unconscionable conduct. It gives regulators serious penalty powers, and it gives consumers and small businesses private rights of action for damages, injunctions and refunds. This guide walks through the parts of the ACL that most often bite in practice.
Who and what the ACL covers
The ACL applies to any "person" (including a company) engaged in conduct "in trade or commerce". That covers virtually every commercial transaction — including online sales, B2B supply, franchising, and services provided by professionals. It does not usually cover private, one-off transactions between individuals.
Two definitions are especially important:
- Consumer (section 3) — a person or business that acquires goods or services under $100,000 (raised from $40,000 in 2021), or of any price if the goods or services are of a kind ordinarily acquired for personal, domestic or household use.
- Small business contract — a standard-form contract where at least one party has fewer than 100 employees or annual turnover under $10 million (the thresholds expanded significantly in November 2023).
1. Misleading or deceptive conduct — section 18
Section 18 is the most litigated provision in Australian commercial law. It prohibits conduct in trade or commerce that is misleading or deceptive, or that is likely to mislead or deceive. Key features:
- No intent required. An honest mistake is still a breach.
- Silence can be misleading where there is a reasonable expectation of disclosure.
- Puffery is not misleading — but the boundary between "the best coffee in Sydney" (puffery) and "we save you 30%" (representation of fact) is where most disputes sit.
- Future representations (section 4) are treated as misleading unless the maker had reasonable grounds when the representation was made.
Section 18 does not carry civil penalties directly, but damages, injunctions and refund orders are available — and specific false-representation provisions in sections 29–34 do carry the full penalty regime.
2. Consumer guarantees — Part 3-2
Every supply of goods or services to a "consumer" carries a set of statutory guarantees that cannot be contracted out of. For goods, these include:
- Acceptable quality (fit for the ordinary purposes, safe, durable).
- Fitness for any purpose disclosed to the supplier.
- Matching description and sample.
- Clear title and undisturbed possession.
For services, they include due care and skill, fitness for purpose, and delivery within a reasonable time. Where the failure is "major" (would not have been acquired if known, unsafe, substantially unfit), the consumer can reject the goods and choose a refund or replacement. Where the failure is minor, the supplier can choose to repair, replace or refund.
3. Unfair contract terms — Part 2-3
Since November 2023, the unfair contract terms regime is significantly harder to breach and significantly more expensive to get wrong. A term of a consumer or small-business standard-form contract is unfair if:
- It would cause a significant imbalance in the parties' rights and obligations.
- It is not reasonably necessary to protect the legitimate interests of the party that benefits.
- It would cause detriment (financial or otherwise) if applied or relied on.
Unfair terms are void, and — since the 2023 reforms — proposing, applying or relying on an unfair term is a civil penalty contravention exposing the business to the same maximum penalties as misleading conduct. Common problem terms: unilateral variation, unilateral termination, broad indemnities, automatic rollover, and one-sided limitation of liability. Read our deeper coverage in Unfair contract terms — expanded regime.
4. Unconscionable conduct — Part 2-2
Section 20 prohibits conduct that is unconscionable within the meaning of the unwritten law. Section 21 (the "statutory" prohibition) is broader and applies to conduct in connection with the supply or acquisition of goods and services. Courts look at the totality of the conduct, including bargaining power imbalance, undisclosed conditions, non-compliance with industry codes, and pressure tactics.
5. Product safety — Part 3-3
The ACL contains a national product safety framework covering safety standards, mandatory reporting of unsafe goods within two days of becoming aware, and product recall powers. The rules apply to every consumer product supplied in Australia — including online marketplaces and imported goods.
6. False or misleading representations — sections 29–34
These sections target specific categories of representation — including price, quality, sponsorship, place of origin, testimonials, guarantees, and needs for goods or services. Each is a standalone civil-penalty provision. False testimonial and fake-review conduct has been a focus for the ACCC in the last three years.
7. Remedies and penalties
Regulators can seek:
- Civil penalties — up to $50 million, three times the benefit, or 30% of adjusted turnover for a corporation; up to $2.5 million for an individual.
- Injunctions, corrective advertising orders and enforceable undertakings.
- Community service and adverse publicity orders.
- Disqualification of directors involved in serious breaches.
Private parties can seek damages, refunds, contract variation, and — for consumer guarantee breaches — repair, replacement or refund.
Practical compliance checklist
- Review standard-form contracts against the expanded UCT regime — supply agreements, subscription terms, website terms, service contracts.
- Audit advertising claims — every performance, savings, comparison or environmental claim needs a documented basis.
- Refund policies must not mislead. "No refunds" and "store credit only" signage is a common source of section 18 and section 29 breaches.
- Consumer guarantee training for front-line staff — most complaints escalate because staff refuse a valid guarantee claim.
- Product safety. Nominate a person responsible for safety incident reporting and recall coordination.
Getting it right
The ACL is the compliance floor for every Australian business — but it is drafted broadly enough that thoughtful commercial teams can go well beyond the floor without adding friction. Envision Legal advises businesses on ACL compliance, unfair contract term reviews, misleading conduct risk, and ACCC investigations.
This article contains general information only and does not constitute legal advice. Envision Legal accepts no liability for any loss arising from reliance on this content. You should seek independent legal advice tailored to your specific circumstances.
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Frequently asked questions
- Where is the Australian Consumer Law actually written down?
- The ACL is Schedule 2 to the Competition and Consumer Act 2010 (Cth). It applies as a national law across the Commonwealth and every state and territory, and is administered jointly by the ACCC and state consumer protection agencies.
- Does the ACL apply to B2B transactions?
- Yes. Most of the ACL applies to conduct in trade or commerce, regardless of whether the counterparty is a consumer or another business. The consumer guarantees and unfair contract terms regimes have their own thresholds — including the expanded UCT regime that captures standard-form contracts with small businesses.
- What is the maximum penalty for a breach?
- For serious contraventions by a corporation, the maximum penalty is the greatest of $50 million, three times the value of the benefit obtained, or (if the benefit cannot be determined) 30% of adjusted turnover during the breach period. Individuals face up to $2.5 million per contravention.
- Can I contract out of consumer guarantees?
- No. The consumer guarantees in Part 3-2 of the ACL cannot be excluded, restricted or modified. A term of a contract that purports to do so is void, and the conduct of asserting the term can itself be a contravention.
- What counts as misleading or deceptive conduct?
- Section 18 prohibits conduct in trade or commerce that is misleading or deceptive, or likely to mislead or deceive. Intention is not required — an honestly-held but incorrect representation, silence in the face of reasonable expectation of disclosure, and puffery that crosses into fact can all breach section 18.